Revlon, Inc. (REV) is paying down debt and focusing on its core business. The company has also seen an increase in sales despite a tough economy.
Company Description
Revlon conducts its business exclusively through its subsidiary, Revlon Consumer Products Corp. and its subsidiaries. They manufacture, market and sell an extensive array of cosmetics and skin care, fragrances and personal care products.
The brand names include Revlon, Colorstay, Almay, Mitchum, and others. Revlon is headquartered in New York City, has 5,600 employees, and a market cap of $660 million.
Sales Are Rising
On July 31 Revlon announced second-quarter results that included an 8% year-over-year increase in net sales. Sale for the quarter were $376 million, up from $349 million last year.
Net income is back in the black after reporting $19.9 million, compared to a net loss of $11.3 million in the same period in 2007. Earnings per share were 40 cents, crushing the consensus estimate which was a loss of 30 cents.
Consensus estimates for full-year 2008 and 2009 are 4 times higher than they were 90 days ago. The current forecasts call for a growth rate of 575% this year and 26% next year.
Sale of Brazilian Brand
Revlon sold Bozzano, a Brazilian brand focusing on men's hair care and grooming, on July 28. The $104 million sale was an all cash transaction with net proceeds of approximately $94 million. Bozzano is a non-core brand and the sale shows Revlons focus to shift toward its core business.
Revlon cosmetics will still have a presence in Brazil through its third party distributor.
Paying Down Debt
On Sep 3 the company announced its plan to pay down $170 million in subordinated debt, ahead of schedule. Revlon will use $63 million in proceeds from the sale of Bozzano. the remaining $107 million will be raised through a new equity rights offering.
A 1-for-10 Reverse Stock Split
Shareholders received 1 share in exchange for 10 shares of Revlon's class A and B common stock on Sep 16.
